Bridging the gap between 60 and oap

[Early Riser]

I am asking you to take a step back for a moment.

Thank you for this advice , ppmmeath. I intend stepping back from our "discussion". As regards the interpretations I have given in earlier posting, I stand by them. No doubt, you will stand by yours. Lets leave it at that.

 

[ppmmeath]

Early Riser, I asked you to take a step back for a moment to consider your interpretation. It was not meant as an insult and if you no longer wish to be involved in the discussion, then of course I respect that, but the very issue pertains to your interpretation and it is why many PS workers are confused, so I have to plug along.

Your interpretation is below:


"Presuming this person joined the public service in 2000, is a Class A PRSI contributor and is a member of a scheme which allows normal retirement at 60 the the answer is no, not necessarily. The person would have to meet all the other conditions for a Supplementary Pension ,ie,"

Of course they are eligible for their full pension:

http://circulars.gov.ie/pdf/circular/finance/2007/33.pdf

"For example, a person who retires on a final pensionable remuneration of €40,000 with 40 years’ reckonable service, will receive an annual occupational pension of €9,078.73 and, subject to meeting the social welfare qualifying requirements, a State Pension of €10,921.27 per year (€209.30 per week as of the date of issue of this Circular), giving a total of €20,000 per year."

A person retiring after 40 years service retires on a salary of €40,000 is entitled to a total of €20,000 a year. It is made up of part occupational and part state (not OAP).


"In certain circumstances, a supplementary pension may be payable to a person, who is fully insured, in respect of periods during which s/he is not employed in any capacity which involves a social insurance contribution and, due to causes outside his/her own control, fails to qualify for social insurance benefit or qualifies for such benefit at less than the maximum personal rate. Lump sum benefits are not integrated."

This is if you do not have all the PRSI contributions in relation to the state part of the pension.

"Minimum Pension age – This is the minimum age from which benefits are payable. Superannuation benefits are not normally payable before the age of 65, except in the 1 “Fully insured member” means a member who is, or was before attaining the age of 66, insured for State Pension (Contributory) [formerly known as the Old Age (Contributory) Pension] under the Social Welfare Acts. case of staff (generally those appointed to an established post before 1 April 2004), whose terms of appointment allow payment of benefits from an earlier age (usually age 60). "

If your retirement age is 60, post 1995 but pre 2004 and fully insured for the "State pension" (Formally known as OAP), then you receive your full pension at 60.

 

[ppmmeath]

Sorry, I don't think that's right. I'm not talking about compulsory retirement (i.e. "get out"). I'm referring to the age at which the public servant normally retires and gets their pension.

Take the following case:

- Commenced in 2000 aged 20
- Earns €80k
- Retires aged 60 in 2040

My understanding is that this person receives their full pension of €40k immediately, with circa €12k of it being made up of what is known as a supplementary pension. Then when the person reaches State Pension age, the supplementary pension is replaced by the State Pension.

But I'm not sure, and the publications on this sort of thing are terrible.

Again Gordon/Japster, you are almost correct with the exception of the circa 12k and where it is derived from. This is the "State pension".

The other part is your "occupational" part, if you complete your full service, then there can be no shortfall there.

It is this 12k that is linked to your PRSI contributions to the "State" pension (Not OAP).

The supplementary pension arises if you don't have enough PRSI contributions for the full payment of that part of the pension.

When you divide the circa 12k by 52 - it gives you 230 a week, the same rate as the maximum "OAP" pension, but this is your "state" pension so when you hit OAP age - there's no change, you don't receive the "OAP" pension on top of this, because in effect, you are already in receipt of it in your pension.

This is exactly the same as the pre-1995 worker who did not pay the Class A stamp and who did not contribute to either the "state" or the "OAP" pension.

You now both receive the very same total pension, except part of yours is made up from your PRSI contributions.

 

[Meath Lady]

I am reading this discussion with interest and would like opinions on my situation. I worked in the local authority from 1977 to 1988 with a fifteen month career break and paid class d contributions. I think these do not count towards an old age pension but would count for widows and orphans. I took redundancy from the local authority in January 1988 with a pension of approximately 2000 per year and I am still receiving a pension which is now 6500 euro. I stayed at home to mind my kids and had another child in 1990. I completed a Labour Force survey in 1988/89 and probably have 10 A rated contributions from this. I also worked on the census in 2002 and possibly have another 10 contributions from this. I commenced my current employment in April 2006 ( so post 2004). and am paying superannuation contributions and prsi towards an integrated pension. I will shortly be 10 years in this job and am almost 59. I would hope to continue in this current position for 3 or 4 more years but not until I am 67. I will therefore not have adequate contributions for a full old age pension. I am unsure if I will be allowed claim Homemakers credits from 1994 to 2002 when my youngest child was 12 as I was receiving the occupational pension. Between Sept 2004 and April 2006 I worked and signed for credits when not employed.

So basically here is my situation: Between Sept 2004 and today I have worked or signed on. So I have approximately 11 years paid contributions and possibly 25 credits todate. If I am healthy enough and my job still exists for another 4 years I will have 15 to 16 years contributions and credits in 2020. I will not receive the old age pension or whatever part I am entitled to until mid 2024. how will the integrated pension affect me at 67? how will it affect me if I resign at 63? Any help on this would be appreciated.

 

[ppmmeath]

I am reading this discussion with interest and would like opinions on my situation. I worked in the local authority from 1977 to 1988 with a fifteen month career break and paid class d contributions. I think these do not count towards an old age pension but would count for widows and orphans.

Correct.

I took redundancy from the local authority in January 1988 with a pension of approximately 2000 per year and I am still receiving a pension which is now 6500 euro.

Noted.

I stayed at home to mind my kids and had another child in 1990. I completed a Labour Force survey in 1988/89 and probably have 10 A rated contributions from this. I also worked on the census in 2002 and possibly have another 10 contributions from this.


"I commenced my current employment in April 2006 ( so post 2004). and am paying superannuation contributions and prsi towards an integrated pension. I will shortly be 10 years in this job and am almost 59. I would hope to continue in this current position for 3 or 4 more years but not until I am 67. I will therefore not have adequate contributions for a full old age pension. I am unsure if I will be allowed claim Homemakers credits from 1994 to 2002 when my youngest child was 12 as I was receiving the occupational pension. Between Sept 2004 and April 2006 I worked and signed for credits when not employed. "

http://www.welfare.ie/en/Pages/Homemakers-Scheme.aspx

The Homemaker scheme was introduced to make it easier for those who provide full-time care for children or for an incapacitated person to qualify for an State Pension (Contributory). The scheme came into effect on 6 April 1994 and applies to both men and women.

One of the qualifying conditions for State Pension (Contributory) is that the person has a minimum yearly average number of contributions since entering social insurance to reaching pension age. The Homemakers scheme provides that contribution years spent working in the home while caring on a full-time basis for a child up to 12 years of age or an incapacitated person age 12 or over will be disregarded in calculating a person's yearly average number of contributions.

to qualify under the scheme the Homemaker must:

• be age 16 or over
• be permanently resident in the state ( see note)
• be under age 66
• live with the person they are looking after, or be in a position to provide full time care and attention to a person who is not living with them
• be caring for the person on a full time basis
• have been previously employed/self employed
• not be engaged in full time employment/self employment (however, part-time work with gross earnings less than €38 per week is allowed)
• not be living in a hospital, convalescent home or other similar institution

Because your situation is very complicated, it would be worthwhile visiting your local SW office (Make an appointment with them) and bring all your relevant documentation, the only way you can find out for sure, whether or not you have enough PRSI stamps for a state pension, is to ask them to calculate it.


I commenced my current employment in April 2006 ( so post 2004). and am paying superannuation contributions and prsi towards an integrated pension. I will shortly be 10 years in this job and am almost 59. I would hope to continue in this current position for 3 or 4 more years but not until I am 67. I will therefore not have adequate contributions for a full old age pension. I am unsure if I will be allowed claim Homemakers credits from 1994 to 2002 when my youngest child was 12 as I was receiving the occupational pension. Between Sept 2004 and April 2006 I worked and signed for credits when not employed.

Are you back in the CS/PS? What is your "retirement" age?




Thanks.

 

[ppmmeath]

Meath Lady:

http://www.citizensinformation.ie/e...etired_people/state_pension_contributory.html

2. Number of paid contributions
If you reach pension age on or after April 6 2012, you need to have 520 full-rate contributions (10 years contributions). In this case, only 260 of the 520 contributions may be voluntary contributions.

This is what you need.

You are 10 years in work and from what I can tell from the link above, this is what you need to be eligible for the state pension.


Now, here is where the confusion lies.

You are paying these PRSI for the "integrated pension" on your retirement from the PS.

If your retirement date is 65, then you receive your full OAP - brought forward to 65 and added to the "occupational" part of your pension, which is your "reckonable" years worked pension.

https://secretaryfinancialcontrolle...pendix-IV-Local-Gov-Superannuation-Scheme.pdf

"For staff who became public servants on or after 1st April 2004 the minimum retirement age is 65."

The determination of pension benefit depends on whether benefits are co-ordinated with Social Welfare entitlements. If pension benefit is co-ordinated it means that the Scheme member is fully insured and is entitled to a Contributory Old Age Pension together with pension benefit under the superannuation scheme.

 

[Gordon Gekko]

Does this mean that someone with a normal retirement age of 60 (e.g. a 2000 entrant) doesn't have to worry about the lack of PRSI contributions from age 60 to 68? (assuming they have 40 years service).

 

[ppmmeath]

Does this mean that someone with a normal retirement age of 60 (e.g. a 2000 entrant) doesn't have to worry about the lack of PRSI contributions from age 60 to 68? (assuming they have 40 years service).

Yes and no. Let me explain further Gordon. If you joined in 2000 and could retire at 60 and receive your pension entitlements, then these are 50% of your final salary.

That is your starting point.

Where you differ from a pre 1995 worker is not in relation to your benefits - they remain the very same.

Where the confusion is arising is the mistaken presumption that you have to be 68 to avail of the part of your pension entitlement that is now made up of part occupational (reckonable years in service) and the "state pension" (formally known as the OAP).

You are deducting this because you think that you have to be 68 to be eligible for it. This creates an "age" gap that never existed in the first place.

The Ghoul posted this link:
https://secretaryfinancialcontrolle...pendix-IV-Local-Gov-Superannuation-Scheme.pdf

And it clearly states:


The determination of pension benefit depends on whether benefits are co-ordinated with Social Welfare entitlements. If pension benefit is co-ordinated it means that the Scheme member is fully insured and is entitled to a Contributory Old Age Pension together with pension benefit under the superannuation scheme.


Your OAP is effectively brought forward and the name changed to a "state pension".

When you hit 60 you are entitled to your FULL pension, let's use the retirement 50k salary as the example.

You are entitled to 25k pension - that is your starting point.

Now how it is funded kicks in.

13k is your "occupational" pension, i.e your benefit based on your full 40 years service.

The 12k (approx) is the "State pension" and this is the part that is based on your PRSI contributions that you have paid since joining in 2000.

These are "integrated" to give you your 25k. Because that is your entitlement.

It is, in effect, your OAP brought forward.

Remember that the point of the exercise was to "equalise" you to the pre 1995 pension entitlement.

They did not pay a contributory PRSI stamp and were never entitled to any state or OAP pension, nor where they entitled to any benefits.

When you "deduct" this in the first place, this is the mistake that is leading to the confusion.

If there is a shortfall in the PRSI pension due to, say a long term illness where you were in receipt of an illness payment, then your stamps reduce because you are in effect, using them.

There could be a shortfall on the PRSI side and this is where the supplementary pension kicks in - to make up that shortfall.

The end result must leave you, a Post 95 Class A PRSI contributor, in the very same pension position as the pre 1996 worker and that is in receipt of 50% of your salary at 60.

 

[Gordon Gekko]

Thanks.

 

[japester]

I'm just wondering about my own situation. I am a post 95er in PS thinking of taking retirement at 60 and will hopefully have about 30 years service done at that stage. With a final salary of say €70k would I then receive €26250 in total at age 60, where about €14k would come directly from the employer and the remainder of about €12k from the state pension? I'd be thinking I'd have enough PRSI contributions for the full amount of state pension at 60 but if I hadn't would I then just get proof from SW that I was short and then apply for the supplementary pension to the employer to make up the relatively small difference? Thanks again to all for their contributions on this important issue, I finally feel a lot more informed about it.

 

[ppmmeath]

I'm just wondering about my own situation. I am a post 95er in PS thinking of taking retirement at 60 and will hopefully have about 30 years service done at that stage.

What is your service requirement for a full pension, is it 30 years (Like a Prison Officer) or 40 years?

With a final salary of say €70k would I then receive €26250 in total at age 60, where about €14k would come directly from the employer and the remainder of about €12k from the state pension?

Is your entire 70k salary reckonable for pension purpose? Or is this inclusive of, for example, overtime?

Your state pension entitlement will be the same as the max OAP pension (brought forward), so if it's 230 a week, then you will receive 12k from this and the balance from your occupational entitlement, which is your reckonable service.

I'd be thinking I'd have enough PRSI contributions for the full amount of state pension at 60 but if I hadn't would I then just get proof from SW that I was short and then apply for the supplementary pension to the employer to make up the relatively small difference? Thanks again to all for their contributions on this important issue, I finally feel a lot more informed about it.

Did you have any certified sick leave, unpaid leave, a career break? These can affect your contributions, so it is vital prior to retirement that you check with the SW. If you are short of PRSI contributions, then you apply for the supplementary pension, you must first apply to the SW and they will tell you whether or not there is a shortfall, you then produce proof of shortfall to the employer.

(iii) Effect of reforms to date – summary 13.27 The extent of the reduction in public service occupational pension benefits arising from changes made in 1995 and 2004 depends on the area of the public service and on the individual circumstances of each employee. The effect of the reforms might best be shown by a hypothetical example; assuming in all three cases (shown beneath) that the person retiring has 40 years’ reckonable service and a final pensionable remuneration of €50,000:-

Pre 1995 civil servant: Pension €25,000 payable at age 60

Post 1995 civil servant: Pension €14,000 payable at age 60 (plus State pension of €11,000 - rounded for purposes of example)


You are welcome, as I said, I only joined because there was confusion in regards to your entitlements should you be retiring at 60, on full service.

 

[Early Riser]

I commenced my current employment in April 2006 ( so post 2004). and am paying superannuation contributions and prsi towards an integrated pension. I will shortly be 10 years in this job and am almost 59. I would hope to continue in this current position for 3 or 4 more years but not until I am 67.

Hi Meath Lady - As a post-2004 entrant I suspect that your "normal retirement age" is 65, unlike in schemes that allowed retirement (without actuarial reductions) at any time from age 60. You should have been given some documentation on the scheme. If so, can you tell us what it says ? Even approximate estimates would be quite different between these two scenarios. Also, and you may not wish to do so, but giving a ballpark indication of annual salary would allow for a ballpark estimate.

In relation to the State Pension ("Old Age" as it was called) yours is a complicated situation and I couldn't even begin to do an estimate. I suggest that you request a copy of your full contribution record - you can do so online here:

https://www.welfare.ie/en/pages/secure/RequestSIContributionRecord.aspx.

With this information your local Social Welfare office might give you opinion on your likely retirement benefits but I strongly suspect that they will be unwilling to undertake this until you are much nearer the State Pension age -there are too many uncertainties in the meantime for them to commit to this. You might contact a local Citizen's Information Centre who may be able to assist with a calculation or you could try posting on the Welfare and State Benefits Forum here. Alternatively if you should happen to know a Social Welfare employee, he/she might assist unofficially.

In any event, if you do retire at 63, do ensure that you keep up your Class A contribution record until your 66th birthday, ie, sign for credits. Given your somewhat patchy record to date this could be enough to bring you into a higher pension rate category at 67.

This is my advice - others may differ and it is up to you what you take out of it.

In any event - best of luck !

 

[japester]

I'm just wondering about my own situation. I am a post 95er in PS thinking of taking retirement at 60 and will hopefully have about 30 years service done at that stage.

What is your service requirement for a full pension, is it 30 years (Like a Prison Officer) or 40 years?

With a final salary of say €70k would I then receive €26250 in total at age 60, where about €14k would come directly from the employer and the remainder of about €12k from the state pension?

Is your entire 70k salary reckonable for pension purpose? Or is this inclusive of, for example, overtime?

Your state pension entitlement will be the same as the max OAP pension (brought forward), so if it's 230 a week, then you will receive 12k from this and the balance from your occupational entitlement, which is your reckonable service.

I'd be thinking I'd have enough PRSI contributions for the full amount of state pension at 60 but if I hadn't would I then just get proof from SW that I was short and then apply for the supplementary pension to the employer to make up the relatively small difference? Thanks again to all for their contributions on this important issue, I finally feel a lot more informed about it.

Did you have any certified sick leave, unpaid leave, a career break? These can affect your contributions, so it is vital prior to retirement that you check with the SW. If you are short of PRSI contributions, then you apply for the supplementary pension, you must first apply to the SW and they will tell you whether or not there is a shortfall, you then produce proof of shortfall to the employer.

(iii) Effect of reforms to date – summary 13.27 The extent of the reduction in public service occupational pension benefits arising from changes made in 1995 and 2004 depends on the area of the public service and on the individual circumstances of each employee. The effect of the reforms might best be shown by a hypothetical example; assuming in all three cases (shown beneath) that the person retiring has 40 years’ reckonable service and a final pensionable remuneration of €50,000:-

Pre 1995 civil servant: Pension €25,000 payable at age 60

Post 1995 civil servant: Pension €14,000 payable at age 60 (plus State pension of €11,000 - rounded for purposes of example)


You are welcome, as I said, I only joined because there was confusion in regards to your entitlements should you be retiring at 60, on full service.

Thanks for your fast reply ppmmeath - it would be 40 years for a full pension in my case and the entire 70k would be reckonable for pension purposes. No unpaid leave or career break so far in my case, only the very very odd day uncertified sick. You've added greatly to this debate along with Early Riser and others

 

[ppmmeath]

No problem Japster.

http://www.welfare.ie/en/downloads/greenpaperchapter13.pdf

As a result of the Public Service Superannuation (Miscellaneous Provisions) Act 2004, the minimum age at which pension benefits are payable to most public servants appointed from 1 April 2004 is 65 years and, for most such staff, there is no compulsory retirement age. For most staff appointed before 1 April 2004, pension benefits are generally payable from age 60, and a compulsory retirement age of 65 applies.

The majority of public service pension schemes have a defined benefit / final salary structure. This means that retirement benefits – lump sum and pension - are calculated by the application of pre defined formulae to length of service and pay (pensionable remuneration) at retirement. 13.8 Maximum superannuation benefits (achievable after 40 years’ pensionable service), in general, consist of a retirement lump sum of 1½ times final pay and a pension of half final pay

This is your entitlement, a lump sum and pension of half final pay, in your case it is 35k.

Pensions for staff who pay full PRSI are integrated with the State Pension (Contributory) (see paragraph 13.16 below).

6 In 1995, the Government decided that established civil servants (and public servants generally) appointed on or after 6 April 1995 should be subject to the Class A rate of PRSI contribution and that their occupational and State pensions should be ‘integrated’. ‘Integration’ means that, in effect, the public service pension awarded on retirement is reduced by the amount of the State pension. At the same time, explicit pension contributions (approximately 5%) were introduced for new members of most schemes which had formerly been non-contributory and the pay scales of these new entrants were increased, effectively to match the contributions being levied.

Your "occupational" pension which was previously calculated at 50% of your reckonable pay and on reaching full service, is now reduced to take into account your entitlement to a State pension, which you have contributed to by way of PRSI contributions.

If you have the full entitlement to the "State Pension" (Formally known as the OAP) and if the max rate is 230 a week, then the occupational part of your pension payable is 35k, less 12k = 23k.

Your state pension is actually your OAP brought forward so that you receive your full entitlement of 50% of reckonable service, just like the pre 1995 person.

Thank you Japster, and again, I did not set out to insult Early Riser in any way. His input has been very important to clarifying the matter. I hope that he can see, that when I asked him to step back, what I meant was to simply take a fresh look at his interpretation.

 

[ppmmeath]

@Early Riser:


In relation to the State Pension ("Old Age" as it was called) yours is a complicated situation and I couldn't even begin to do an estimate. I suggest that you request a copy of your full contribution record - you can do so online here:

I fully agree, it is vital that she checks out her required contributions, but I posted a link which seemed to indicate that she requires 10 years of PRSI contributions and she confirmed that she is working and paying the PRSI since 2006 - 10 years ago.

In any event, if you do retire at 63, do ensure that you keep up your Class A contribution record until your 66th birthday, ie, sign for credits. Given your somewhat patchy record to date this could be enough to bring you into a higher pension rate category at 67.

I won't contradict you on this Early Riser, but the only reference that I have in relation to a post 2004 CS is in the link above and it states:

"Post 2004 civil servant: Pension €14,000 payable at age 65 (plus State pension of €11,000)"

Now this refers to a post 2004 employee retiring on full service and with full PRSI contributions, however I take on board your post because Meath Lady has neither full service years and may not have full PRSI contributions.

I am searching for any other link to confirm this, but as you correctly say, she really needs to check out her own entitlements.

 

[Early Riser]

I'm just wondering about my own situation. I am a post 95er in PS thinking of taking retirement at 60 and will hopefully have about 30 years service done at that stage. With a final salary of say €70k would I then receive €26250 in total at age 60, where about €14k would come directly from the employer and the remainder of about €12k from the state pension? I'd be thinking I'd have enough PRSI contributions for the full amount of state pension at 60 but if I hadn't would I then just get proof from SW that I was short and then apply for the supplementary pension to the employer to make up the relatively small difference? Thanks again to all for their contributions on this important issue, I finally feel a lot more informed about it.

Hi Japester - here is my take on your situation and your proposed retirement plans. You can take from it as you wish or discard it.

At 60 you would be eligible to receive an occupational pension of €17120 (as calculated by the Pension Modeller for your category of employment : http://www.cspensions.gov.ie/calculators.asp )
You may also be entitled to a Supplementary Pension of €9120, payable also by your employer on application to them by you. I say "may" because you must also meet the conditions as outlined above in my previous post, number 52. If you intend to retire fully and not take up other gainful employment then you should clearly qualify for the Supplementary.

However, in order to keep up your Social Insurance record I would urge you to strongly consider applying for Unemployment Benefit and subsequently applying for PRSI credits. In this event the Supplementary pension would not be paid while you are obtaining benefit (9 months) but would be payable afterwards while you are obtaining the Supplementary. When you reach State Pension age (be it 67 or 68 in your case) you MUST then apply for the State Pension. If the State Pension granted should happen to be less than €9120 (unlikely) you will continue to receive a smaller Supplementary pension to top you up to this amount. If the State pension is equal to or greater than €9120 then you lose the Supplementary - but continue with the €17120 of course. This is why it is important to keep up your PRSI record to age 66 - early retirees in this scheme can sometimes get more from the State Pension than from the Supplementary pension - but never less.

Of course, if you opt to take up gainful employment in your retirement this will also keep up your PRSI record - but you will not be eligible for the Supplementary part of the pension while doing so.

Best of luck.

 

[japester]

Hi Japester - here is my take on your situation and your proposed retirement plans. You can take from it as you wish or discard it.

At 60 you would be eligible to receive an occupational pension of €17120 (as calculated by the Pension Modeller for your category of employment : http://www.cspensions.gov.ie/calculators.asp )
You may also be entitled to a Supplementary Pension of €9120, payable also by your employer on application to them by you. I say "may" because you must also meet the conditions as outlined above in my previous post, number 52. If you intend to retire fully and not take up other gainful employment then you should clearly qualify for the Supplementary.

However, in order to keep up your Social Insurance record I would urge you to strongly consider applying for Unemployment Benefit and subsequently applying for PRSI credits. In this event the Supplementary pension would not be paid while you are obtaining benefit (9 months) but would be payable afterwards while you are obtaining the Supplementary. When you reach State Pension age (be it 67 or 68 in your case) you MUST then apply for the State Pension. If the State Pension granted should happen to be less than €9120 (unlikely) you will continue to receive a smaller Supplementary pension to top you up to this amount. If the State pension is equal to or greater than €9120 then you lose the Supplementary - but continue with the €17120 of course. This is why it is important to keep up your PRSI record to age 66 - early retirees in this scheme can sometimes get more from the State Pension than from the Supplementary pension - but never less.

Of course, if you opt to take up gainful employment in your retirement this will also keep up your PRSI record - but you will not be eligible for the Supplementary part of the pension while doing so.

Best of luck.

Thanks very much for that information Early Riser - it really is great to know that I will be able to receive the extra amount on top of the occupational pension when I reach 60 to bring me in line with my pre-95 counterparts - I was genuinely concerned about this because it was difficult for me to interpret the documentation I was reading. Thanks also for your advice about keeping the PRSI contributions going even in retirement - from my case above this could add a whole €3k to my pension upon reaching 68, which is a serious amount extra.

 

[ppmmeath]

Japster, what you really need to do is clarify the position with your pensions department and/or the Social Welfare. I apologise because both Early Riser and I are at odds.

@Early Riser, I completely see where you are coming from, but it appears to me that there is a discrepancy somewhere, please see this link and please note, that my aim is not to contradict or argue with you, when you read the links below, you will see that what they are saying, is not being applied to the modeller.

http://cspensions.gov.ie/ (This is the same link that you go to for that modeller click FAQ's).


8. What is pensionable remuneration?

Generally, pensionable remuneration is final pay (i.e. salary payable on the last day of reckonable service), plus the average of the best of three consecutive years’ pensionable allowances in the final ten years of service.

The benefits may, in some cases be based on an average salary. For instance, if, within the last 3 years of service, an officer has changed grade (e.g. been promoted) or received a personal change in pay, an average pay figure will be used which takes account of the final salary and the salary of the former grade and the relative periods spent in the two grades in the last 3 years.

Where the person is retiring on grounds of ill-health, averaging does not apply if the person had the potential for service to avoid the averaging.

9. How are my pension and lump sum calculated?

This scheme provides pension benefits which take account of the State Pension (Contributory). No account is taken of the State Pension in calculating the lump sum. Subject to a minimum of 2 years qualifying service your pension and lump sum are calculated as follows:

Pension: Up to the 31st December 2003, for the civil service pension, pensionable remuneration is co-ordinated with the State Pension (Contributory) payable to a Single Person.

The pension is 1/80th of net pensionable remuneration (as defined at 4 above) for each year of service subject to a maximum of 40/80ths. This means that on retirement with 40 years reckonable service the occupational pension along with the State Pension amounts to one-half of pensionable remuneration.

Part 4 as referred to states:

"4. Do I pay contributions for these benefits?

Officers who are in the contributory scheme pay a personal contribution. These officers also pay Class A PRSI but their salary is higher (i.e. 20/19ths) than the standard salary. The personal contribution is 1½% of pensionable remuneration plus 3½ % of net pensionable remuneration. Officers also pay contributions of 1½% of pensionable remuneration for spouses’ and children’s pension (question 30). Pensionable remuneration is basic salary plus pensionable allowances. Net pensionable remuneration, for the purpose of contributions, is pensionable remuneration, less twice the maximum rate of Social Welfare State Pension (Contributory) payable to a single person. (see question 8 also).

In this link:

http://www.cspensions.gov.ie/SuperannuationHandbookandGuidanceDec20061.pdf

7. INTEGRATION : POST 5 APRIL 1995 STAFF Return to Contents page 7.1

As indicated at paragraph 5.1, an integration method is used in calculating the pension (but not the lump sum) benefits of officers appointed on or after 6 April 1995. Integration takes into account the value of the Contributory State Pension (CSP) in calculating the pension payable from the Superannuation Scheme.

The integration method or formula was amended effective from 1 January 2004.

7.2 The 2004 Integration Formula: The method of calculating Main Scheme pension for officers recruited on or after 6 April 1995 who qualify for benefits on or after 1 January 2004 is: (a) For that part of the officer’s pensionable remuneration which is less than or equal to 31 /3 times the current rate of CSP, 1 /200th of pensionable remuneration multiplied by the number of years of reckonable service plus (b) For any part of the officer’s Pensionable Remuneration which exceeds 31 /3 times CSP, 1 /80th of pensionable remuneration multiplied by the number of years of reckonable service A multiplier of 3.333333 (i.e. 6 decimal places) is used to calculate 31 /3 times CSP.

The maximum number of years of reckonable service is 40. The CSP rate is the maximum Contributory State Pension payable by the Department of Social and Family Affairs to a single person without dependants on the last day of the officer's pensionable service.

EDIT:

[broken link removed]

Page 28.

What is an integrated pension scheme? An integrated scheme is one where the pension payable, or the design of the benefit promise made, takes into account the State pension. An integrated scheme looks at the State pension as part of the total pension package promised to employees on retirement. One reason for this is that both employers and employees make substantial social insurance (PRSI) contributions and these, in turn, entitle scheme members to substantial Social Welfare benefits, including State pension.

How does integration work?

There are many ways in which integration can be achieved. Different methods are used from one scheme to another and between defined benefit and defined contribution schemes. The examples given below show the methods most frequently used. The examples shown below assume an annual State pension of €12,000 (2012).


Example Pension promise: 40/80ths Actual salary: €45,000

State pension offset: (2.0 x €12,000) = €24,000 Pensionable salary: (€45,000 - €24,000) = €21,000

Scheme pension: 40/80ths x €21,000 = €10,500 State pension: €12,000 Total pension: €12,000 + €10,500 = €22,500 (40/80ths of €45,000)

In this case, the State pension of €12,000 provides the required pension of 50% of the first €24,000 of salary. The employer’s pension scheme will then provide the balance based on the salary in excess of this amount.

My final advice, contact the pensions authority.

I will bow out now, but wish you the best of luck.

 

[japester]

Japster, what you really need to do is clarify the position with your pensions department and/or the Social Welfare. I apologise because both Early Riser and I are at odds.

@Early Riser, I completely see where you are coming from, but it appears to me that there is a discrepancy somewhere, please see this link and please note, that my aim is not to contradict or argue with you, when you read the links below, you will see that what they are saying, is not being applied to the modeller.

http://cspensions.gov.ie/ (This is the same link that you go to for that modeller click FAQ's).


8. What is pensionable remuneration?

Generally, pensionable remuneration is final pay (i.e. salary payable on the last day of reckonable service), plus the average of the best of three consecutive years’ pensionable allowances in the final ten years of service.

The benefits may, in some cases be based on an average salary. For instance, if, within the last 3 years of service, an officer has changed grade (e.g. been promoted) or received a personal change in pay, an average pay figure will be used which takes account of the final salary and the salary of the former grade and the relative periods spent in the two grades in the last 3 years.

Where the person is retiring on grounds of ill-health, averaging does not apply if the person had the potential for service to avoid the averaging.

9. How are my pension and lump sum calculated?

This scheme provides pension benefits which take account of the State Pension (Contributory). No account is taken of the State Pension in calculating the lump sum. Subject to a minimum of 2 years qualifying service your pension and lump sum are calculated as follows:

Pension: Up to the 31st December 2003, for the civil service pension, pensionable remuneration is co-ordinated with the State Pension (Contributory) payable to a Single Person.

The pension is 1/80th of net pensionable remuneration (as defined at 4 above) for each year of service subject to a maximum of 40/80ths. This means that on retirement with 40 years reckonable service the occupational pension along with the State Pension amounts to one-half of pensionable remuneration.

Part 4 as referred to states:

"4. Do I pay contributions for these benefits?

Officers who are in the contributory scheme pay a personal contribution. These officers also pay Class A PRSI but their salary is higher (i.e. 20/19ths) than the standard salary. The personal contribution is 1½% of pensionable remuneration plus 3½ % of net pensionable remuneration. Officers also pay contributions of 1½% of pensionable remuneration for spouses’ and children’s pension (question 30). Pensionable remuneration is basic salary plus pensionable allowances. Net pensionable remuneration, for the purpose of contributions, is pensionable remuneration, less twice the maximum rate of Social Welfare State Pension (Contributory) payable to a single person. (see question 8 also).

In this link:

http://www.cspensions.gov.ie/SuperannuationHandbookandGuidanceDec20061.pdf

7. INTEGRATION : POST 5 APRIL 1995 STAFF Return to Contents page 7.1

As indicated at paragraph 5.1, an integration method is used in calculating the pension (but not the lump sum) benefits of officers appointed on or after 6 April 1995. Integration takes into account the value of the Contributory State Pension (CSP) in calculating the pension payable from the Superannuation Scheme.

The integration method or formula was amended effective from 1 January 2004.

7.2 The 2004 Integration Formula: The method of calculating Main Scheme pension for officers recruited on or after 6 April 1995 who qualify for benefits on or after 1 January 2004 is: (a) For that part of the officer’s pensionable remuneration which is less than or equal to 31 /3 times the current rate of CSP, 1 /200th of pensionable remuneration multiplied by the number of years of reckonable service plus (b) For any part of the officer’s Pensionable Remuneration which exceeds 31 /3 times CSP, 1 /80th of pensionable remuneration multiplied by the number of years of reckonable service A multiplier of 3.333333 (i.e. 6 decimal places) is used to calculate 31 /3 times CSP.

The maximum number of years of reckonable service is 40. The CSP rate is the maximum Contributory State Pension payable by the Department of Social and Family Affairs to a single person without dependants on the last day of the officer's pensionable service.


I will bow out now, but wish you the best of luck.

No problem at all ppmmeath, you have been a mine of information on this matter. I am such a long way off from retirement at this point I won't draw my HR dept or SW on me at this stage - I don't think my HR dept in particular would welcome any queries from someone so far away from retirement! However, it is very reassuring to know that both yourself and Early Riser are in unison in that you both expect that I will be entitled to an amount that equates to what my pre-95 counterpart would get when I retire at 60. From what I had read about it I hoped that would be the case, but having read your contributions I am even more convinced everything will be alright on that score when the time comes. Now I just need to keep plugging away, keep healthy and enjoy the rest of my working days!

 

[ppmmeath]

Japster, yes you are right - no matter which way you calculate it, you would be entitled to the same payment.

Where Early Riser and I differ is on what you have to do at 60 to avail of that entitlement.

I am coming from the point of your "entitlement" and that entitlement is a DB scheme which entitles you to 40/80ths of your salary which is made up of an Occupational Pension and a State pension.

According to the pension authority a DB pension is:

"Public sector defined benefit schemes are occupational pension schemes that provide a set level of pension at retirement, the amount of which normally depends on your service and your earnings at retirement or in the years immediately preceding retirement.

For public servants who joined prior to 6th April 1995, a pension of 1/80th of final earnings is payable for each year of service. A gratuity (cash sum) of 3/80ths of final earnings is also payable."

For public servants who joined on or after 6th April 1995, pensions are coordinated with the State pension.

This is known as "integration" in the private sector and "coordination" in the public sector.

An integrated scheme looks at the State pension as part of the total pension package promised to employees on retirement. One reason for this is that both employers and employees make PRSI contributions and these, in turn, entitle scheme members to Social Welfare benefits, including State pension. "

So, as you can see, your pension promise is 50% of your salary. So from where I am coming from that is your starting point.

According to the link:

"Example Pension promise: 40/80ths Actual salary: €45,000

State pension offset: (2.0 x €12,000) = €24,000 Pensionable salary: (€45,000 - €24,000) = €21,000

Scheme pension: 40/80ths x €21,000 = €10,500

State pension: €12,000

Total pension: €12,000 + €10,500 = €22,500 (40/80ths of €45,000)

In this case, the State pension of €12,000 provides the required pension of 50% of the first €24,000 of salary. The employer’s pension scheme will then provide the balance based on the salary in excess of this amount."

------------------

In your case it would be 40/80th of actual salary: €70,000

State pension offset x 2 = €24,000 pensionable salary: (€70,000 - €24,000) = €46,000

Scheme pension: 40/80th x €46,000 =€23,000

State pension: €12,000 + €23,000 = €35,000 (40/80ths of €70,000)

-------------------

Now that is according to the pensions authority. If your "promise" when you joined was 50% of your salary on retirement with full service and full PRSI entitlement, then this is what you are entitled to.

It would be absolutely grossly unfair if, because of how the model changed after 1995, you had to sign on for 9 months and then apply for a supplementary pension to age 68 - to receive the very same pension as your pre 1995 counterpart received at 60.

Remember that he didn't pay a Class A stamp and you did.

So all your 1995 counterpart had to do was work his 40 years.

Remember that you are supposed to be "equal" to a pre 1995 and receive the same pension as if it was calculated the way his/her pension was calculated.

You have to work 40 years, pay 40 years PRSI contributions yet on retirement you have to make yourself available for work (Sign on for JSB) for 9 months, then apply for a supplementary pension until you are 68?

All to receive the same pension that your pre 1995 counterpart got on retirement at 40 years?

Under no circumstances could this be considered "fair and equal" treatment, I am sorry, but it just flies in the face of logic.